30/08/2022
A saving grace to stop you from spending your life saving for a place; the potential introduction of 50-year fixed-rate mortgages aims to get young people onto the property market.
The UK government is considering the idea due to the extortionate housing market restricting young people from leaving their childhood homes. Recent data suggests that nearly a third of people aged twenty to thirty-four in the UK still live at home, and as prices continue to increase, this percentage will only go up.
Long-term fixed-rate mortgages are suggested to improve affordability by stretching a loan out over a longer period, reducing monthly payments. Currently, the longest mortgage in the UK is forty years, but some countries have already excelled past this number; for example, Japan has a fixed mortgage of one hundred years. These ultra-long mortgages have been considered a creative way to assist first-time buyers to afford a home, and for some, it is seemingly the only way even to consider owning a home.
First Time Buyers may soon be able to purchase a home over 50 years.
This idea of long-term fixed-rate mortgages aims to improve affordability by stretching a loan out over a longer period, consequently reducing monthly payments. Currently, the longest mortgage rate in the UK is forty years old, but some countries have already reached this number. For example, Japan has an option for a fixed mortgage of one hundred years. These ultra-long mortgages have been branded as a creative way to assist first-time buyers to afford a home, and for some, it is the seemingly the only way even to consider owning a home.
Looking at the advantages, a 50-year fixed mortgage rate means you can have a better standard of living with lower monthly payments. A 50-year mortgage can make home ownership easier to qualify for as a first-time home buyer. Furthermore, monthly payments mean that you will have more room in your budget for paying for alternate expenses.
Negatively, there are many disadvantages to a 50-year mortgage. You may pay much more interest over the loan period is far from positive. In addition, you will build equity in the home extremely slowly and fail to gain back much equity if you decide to sell the home a couple of years later.
However, there are many concerns that the longer the fixed mortgage price, the higher the total repayments, which could result in unaffordable figures. 30-year fixed mortgage rates are considered more attainable and maintainable for people, as 50-year mortgages will come with higher interest rates than their 30-year counterparts and may be favoured over the extended 50 years fixed mortgage rate.
Devine Group is a privately owned Group of Companies established in 1974. Every successful business needs a solid foundation to build from. In June 1974 the owner and Chairman Mr. Jim Devine set out to build a group of companies based on a rock of financial stability. Minimal debt, cash reserves and an attitude to continually reinvest back into the business. Our core business elements are Infrastructure, Groundwork, Plant Hire, Development.
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